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In this cluster, we define not only ‘Programme budgeting’, but also ‘Marginal analysis’ and ‘Planning and Programme Budgeting System’.
Programme budgeting
Programme budgeting is a technique that enables personnel in a health service, and those who use the health service, to identify how much money has been invested in major health programmes, with a view to influencing future investment.
Source: Brambleby P, Jackson A, Gray JAM (2007) Better Allocation for Better Health and Healthcare: The First Annual Population Value Review. NHS National Knowledge Service and Commissioning Directorate, Department of Health. Page 8.
Three examples of the term in use:
Programme budgeting provides a rich source of information that will enable managers and clinicians to work together to improve healthcare for the local population … .
Programme budgeting could at last come into its own, linking expenditure to pathways and quality and outcome data.
Programme Budgeting should be used more to identify areas where increased spending is not achieving better outcomes.
Marginal analysis:
Marginal analysis is an economic appraisal technique that evaluates incremental changes in costs and benefits when resources in programmes are increased, decreased or deployed in different ways.
Source: Brambleby P, Jackson A, Gray JAM (2007) Better Allocation for Better Health and Healthcare: The First Annual Population Value Review. NHS National Knowledge Service and Commissioning Directorate, Department of Health. Page 8.
Three examples of the term in use:
Programme budgeting and marginal analysis is an approach to commissioning and redesign of services that can accommodate both medical and managerial cultures and the widest constituency of professional, patient, and public values within a single decision making framework. It allows for the complexities of health care while adhering to the two key economic concepts of opportunity cost and the margin.
The task of measuring costs and benefits should be done through marginal analysis. This involves starting with a particular mix of services and analysing changes in that mix. If resources can be shifted to produce greater benefit then this should be done.
Alain Enthoven (1988) makes this point nicely, writing: “An efficient allocation of health care resources to and within the health care sector is one that minimizes the social cost of illness, including its treatment. This is achieved when the marginal dollar spent on health care produces the same value to society as the marginal dollar spent on education, defense, personal consumption, and other uses. Relevant costs include the suffering and inconvenience of patients, as well as the resources used in producing health care. This goal should not be confused with minimizing or containing health care services, often as a share of gross national product (GNP). But, a lower percentage of GNP spent on health care does not necessarily mean greater efficiency. If the reduced share of GNP is achieved by denial or postponement of services that consumers would value at more than their marginal cost, then efficiency is not achieved or enhanced by the cut in spending” (p.11).
Planning and Programme Budgeting System (PPBS):
PPBS is an integrated management system that places emphasis on the use of analysis for program decision making. The purpose of PPBS is to provide management with a better analytical basis for making program decisions, and for putting such decisions into operation through an integration of the planning, programming and budget functions. Program decision making is a fundamental function of management. It involves making basic choices as to the direction of an organization’s effort and allocating resources accordingly. This function consists first of defining the objectives of the organization, then deciding on the measures that will be taken in pursuit of those goals, and finally putting the selected courses of action into effect.
Source: Summer R (2018) Planning and Program Budgeting System (PPBS). Guest Post. January 1, 2018. Nonprofit Management, Performance Measurement, Program Evaluation, Work Plan – Vision, Goals, Objectives. http://www.readytothink.net/management_consulting/work-plan-vision-goals-objectives/planning-programming-budgeting-system-ppbs/
Example of the term in use:
The fundamental idea behind PPBS was decision making based on explicit criteria of the national interest in programs, as opposed to decision making by compromise among various institutional, parochial, or other vested interests.
